Publications
Utility, Telecommunications, and Rental Data in Underwriting Credit
Research Report
Report Summary
Proponents have been arguing for more than 20 years that utility, telecommunications, and rental payment history can expand access to credit among historically underserved consumers without compromising sound underwriting practices or sustainable mortgage finance. Despite efforts to make such data more accessible, however, estimates are that only 2 to 5 percent of consumers who make such payments have that data in their credit bureau files today.
With policymakers, financial services companies, and other stakeholders focusing renewed attention on utility, telecom, and rental payment history, this report examines the history of efforts to tap such data for credit underwriting, empirical research on its effects on the inclusiveness and predictiveness of credit scoring models, recent developments that are both accelerating and complicating UTR initiatives, and key market and policy issues that will determine whether such efforts can reach scale.
While historical experience and current challenges suggest that utility, telecom and rental payment history information is not a panacea, the report concludes that with thoughtful development it has the potential to benefit a considerable number of consumers.
Overviews
We are grateful to a broad range of stakeholders who participated in interviews and provided constructive feedback that strengthened this report. We thank the following:
Acknowledgments
We are grateful to a broad range of stakeholders who participated in interviews and provided constructive feedback that strengthened this report. We thank the following:
With Support From
Flourish Ventures
Flourish, a venture of the Omidyar Group, has provided operating support to FinRegLab since its inception. Flourish is an evergreen fund investing in entrepreneurs whose innovations help people achieve financial health and prosperity. Established in 2019, Flourish is funded by Pam and Pierre Omidyar. Pierre is the founder of eBay. Managed by a global team, Flourish makes impact-oriented investments in challenger banks, personal finance, insurtech, regtech, and other technologies that empower people and foster a fairer, more inclusive economy.
Capital One Financial Corporation
(www.capitalone.com) is a financial holding company which had $307.9 billion in deposits and $440.3 billion in total assets as of June 30, 2022. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses, and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.
NYCA Partners
Founded in 2014, Nyca is a venture capital firm focused solely on investing in financial services companies where technology is a critical competitive distinction. Nyca’s mission is to bridge the gap between financial institutions and startup founders.
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Utility, Telecom & Rental Payment History
Utility, telecom, and rental payment history can help to assess how credit applicants manage housing and other recurring expenses. FinRegLab and the Urban Institute have examined available research, historical and recent initiatives to increase data access and use for credit underwriting, and market and policy issues that will determine whether such efforts can reach scale. Learn More
Events
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Unlocking Doors: The Promise and Peril of Using Alternative Data in Mortgage Underwriting
Read more: Unlocking Doors: The Promise and Peril of Using Alternative Data in Mortgage UnderwritingBuilding on their report about the use of utility, telecommunications and rental payments history for credit underwriting, FinRegLab and the Urban Institute hosted a webinar in April 2022 to examine the current state of play and the evolving policy landscape. Leaders from the field discussed data access and quality and how to build more robust…
About FinregLab
FinRegLab is an independent, nonprofit organization that conducts research and experiments with new technologies and data to drive the financial sector toward a responsible and inclusive marketplace. The organization also facilitates discourse across the financial ecosystem to inform public policy and market practices. To receive periodic updates on the latest research, subscribe to FRL’s newsletter and visit www.finreglab.org. Follow FinRegLab on LinkedIn.
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